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Acquiring And Creating New Resources In Your Accounting Practice

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In our last couple of strategy development sessions, I talked to you about the assets you need to make your business model work.

You learned what Strategic Assets were, and were given a worksheet to help you identify your Strategic Assets, and their capabilities.

Next, you were shown how to relate resources in a way that allowed you to identify ones that worked together and ones that worked independently.

Now, before we go any further, I want to hammer the idea of capabilities a bit by saying that resources do not provide solutions to needs, capabilities provide solutions to needs.

A resource is basically a thing. Being able to do something with a resource is a capability, and the combination of two capabilities can become a Strategic Resource, with capabilities of its own.

Seems like an example would be good right about now.

Let’s say you have a computer in your office. It is a resource, and it is capable of running software, but by itself, at this point, it is pretty useless as far as solving the needs of your target market. Unless, of course, you have a target market of one individual who happens to need a computer that runs software.

Now, you install some accounting software to this computer. By itself, the software is useless. But, installed on a computer, it becomes a new resource, capable of accepting data and producing financial statements.

But, even this new resource is useless, unless you add a third resource, a human who knows how to operate the system.

 

Which brings us to the key of understanding your resources.

Refer back to the Rainmaker Strategic Resources Worksheet you downloaded in your previous session, and you will see that Strategic Resources are primarily intangible, whether intellectual or knowledge based, the systems and processes you have developed in your practice, or the human resources and their network of relationships.

Your Strategic Resources encompass both an individual’s capabilities, and your practice’s capabilities. And, those capabilities are either technical or social. Download the Rainmaker Organizational Capabilities Matrix by clicking HERE and see what I mean.

This should give you even one more dimension to use when looking at your resources and their capabilities. And, help you understand the way your firm, and any alliances you form, work strategically.

The ways you and your staff work together encompass your practice capabilities. An individual may have technical competence, know tax preparation or financial statement preparation, or they may have leadership capabilities, but the combination of your staff and your firms technical competences develops capabilities.

An accounting firm is a Knowledge Intensive Firm, and as such, uses many technology and management-related services in order to provide complex services.

An accounting firm is a Knowledge Intensive Firm, and as such, uses many technology and management-related services… Click To Tweet

As a professional practice, your firm might one day be characterized by high number of professionally qualified staff and you may have established ‘traditional’ or ‘ad hoc’ organizational structures.

An accounting practice survives by the skills and knowledge of its staff, who deliver a range of specialized and often unique projects for their clients. Professional practitioners are driven by the requirements of both new and existing clients, and a series of discrete projects. These projects often require hands-on interaction with clients and other organizations, leading to the co-production of knowledge with clients and other partners.

The ability to perform projects is also based on organizational knowledge, and accounting firms develop extensive operating routines to support their project work, including project reviews, post-project reviews, team formation and assembly procedures, and knowledge management systems.

These operating routines allow these practices to offer a package of services that draw upon the experience and knowledge held within the firm.

This said, much of the knowledge your practice has remains tacit, embedded in uncodified routines, and rooted in your firm’s social context.

In many accounting firms, it is the human assets that are invaluable and are the source of competitive advantage, because they are unique, rare and difficult to imitate.

Their key assets are experience based knowledge, gained through practicing a craft skill over time, and in a variety of different situations.

The project-based nature of accounting work, however, can make the activities of accounting practitioners appear highly episodic and ad hoc.

The project-based nature of accounting work, however, can make the activities of accounting practitioners appear… Click To Tweet

Project work involves highly differentiated and customized demand; clients negotiate the design of products and services to meet their special requirements. Thus, the knowledge and skills needed to perform some projects can be highly specific and localized.

Other projects, however, may require more general knowledge that will be applicable across many different projects. The fundamental challenge for these firms is to translate project level learning into organizational capability, and that is where your analysis of the needed resources comes in.

Go ahead and download the Rainmaker Capability Development and Review worksheets by clicking HERE and take a look at them.

Since many of the problems and challenges faced by your target market are unique, context-specific and highly localized, you will be required to draw upon your human and technical resources in order to work out a novel solution to your features resource and capabilities needs, often in collaboration with your clients and prospects.

While it is economical to be able to re-use resources and capabilities, and gives you the ability to offer low margins, the routine can become uninteresting work. But, you can target complex, non- routine projects that build capability and reputation to support higher fees.

Take a look back at the Needs Assessment Worksheet you completed in our last session. Identify the features that you identified as “Must Have” or “Attractive.” These are the primary features you will want to include in your service offerings, whether you are reviewing existing services or designing new services. These features satisfy the needs your clients and prospects are wanting fulfilled or satisfied.

List the capabilities you must have in order to offer these features.

Next, use the Capability Development Matrix Worksheet to fit the capabilities you have identified as being needed, into your strategy or strategies, and follow the steps to identify capabilities and resources that will be needed to create or acquire these new capabilities.

Once you have identified the combination of capabilities you will require, you have identified a new resource.

Once you have identified a desired resource, move to the Strategic Resource Development Review worksheet and follow through the worksheet to evaluate the strategic importance of the resource created by the capabilities you have identified.

 

After you have identified the resources that meet all the requirements of being Strategic Resources , then evaluate their potential by downloading the Rainmaker Value Matrix by clicking HERE and use it to examine the processes your new resource will be used in to determine whether it is a new process or feature, and whether it has growth potential through planned improvements.

The creation or acquisition of Strategic Resources is a big first step in the development of your Competitive Advantage. And, the ability to continue developing new and improved services will enhance your position as a market leader.

Join us here at Practice Builder Publishing and become a part of the community, whether you become a contributing author, a peer recruiter, or merely a raving devotee of the Practice Builder Publishing resources, I'll work with you personally so you can reach the goals you set.

Best to you and yours,

kirks-sig

 

Kirk

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